{"id":24399,"date":"2022-05-30T15:46:45","date_gmt":"2022-05-30T15:46:45","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=markets&#038;p=24399"},"modified":"2026-10-19T13:09:14","modified_gmt":"2026-10-19T07:39:14","slug":"understanding-the-performance-of-your-fund","status":"publish","type":"markets","link":"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/understanding-the-performance-of-your-fund\/","title":{"rendered":"Mutual Fund Factsheet"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"24399\" class=\"elementor elementor-24399\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1f6961e elementor-section-full_width tab_container elementor-section-height-default elementor-section-height-default\" data-id=\"1f6961e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-a39cd43\" data-id=\"a39cd43\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-9cf5204 elementor-section-full_width elementor-section-height-default elementor-section-height-default\" data-id=\"9cf5204\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-wide\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-f92fd18 chapters_list\" data-id=\"f92fd18\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-d6c50f6 elementor-widget elementor-widget-shortcode\" data-id=\"d6c50f6\" data-element_type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">\t<script>\n\t\tjQuery(document).ready(function(){\n\t\t\tjQuery(\"#post_chapters a[href*='\" + location.pathname + \"']\")\n\t\t\t\t.addClass(\"current\")\n\t\t\t\t.attr(\"aria-current\", \"page\");\n\t\t})\n\t<\/script>\n\t<div class=\"desktop_chapters\"><div id=\"post_chapters\"><div class=\"post_chapters-heading\">Chapters<\/div><ul><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/background-and-orientation\/\">Background and Orientation<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/personal-finance-math\/\">Personal Finance Math<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/money-today-vs-money-tommorrow\/\">Money Today vs Money Tommorrow<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/the-retirement-part-1\/\">The Retirement -Part 1<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/assumptions-in-retirement-planning\/\">Assumptions in Retirement Planning<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/understanding-stock-funds\/\">The Role of Mutual Funds in Modern Finance<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/concept-of-fund-and-nav\/\">Concept of Fund and NAV<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/understanding-the-performance-of-your-fund\/\">Mutual Fund Factsheet<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/the-equity-scheme\/\"> The Equity Scheme<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/equity-scheme-part-2\/\">Equity Scheme Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/debt-funds-part-1\/\">Debt Funds Part 1<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/monitoring-your-portfolio\/\">Debt Funds Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/debt-funds-part-3\/\">Debt Funds Part 3<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/debt-funds-part-4\/\">Debt Funds Part 4<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/investing-in-bonds\/\">Investing in Bonds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/index-funds\/\">Index Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/arbitrage-funds\/\">Arbitrage Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/measuring-mutual-fund-returns\/\">Measuring Mutual Fund Returns<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/rolling-returns\/\">Rolling Returns<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-expense-ratio\/\">Mutual Fund Expense Ratio<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-benchmarking\/\">Mutual Fund Benchmarking<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-beta-sd-and-sharpe-ratio\/\">Mutual Fund Beta SD and Sharpe Ratio<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/sortino-and-capture-ratios\/\">Sortino and Capture Ratios<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/how-to-analyse-equity-mutual-funds\/\">How to Analyse Equity Mutual Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/how-to-analyse-debt-mutual-fund\/\">How to Analyse Debt Mutual Fund<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-portfolio\/\">Mutual Fund Portfolio<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/smart-beta-funds\/\">Smart Beta Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/asset-allocation\/\">Asset Allocation<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/exchange-traded-funds\/\">Exchange Traded Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/basics-of-macro-economics\/\">Basics of Macro Economics<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/personal-finance-part-1\/\">Personal Finance-Part 1<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/personal-finance-review-part-2\/\">Personal Finance Review Part 2 <\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/know-your-funds\/\">Know Your Funds<\/a><\/li><\/ul><\/div><\/div><div 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     <\/li>\n                    \n                                  <\/ul>\n            <\/div>\n            \n            <div class=\"eael-tabs-content\">\n\t\t        \n                    <div id=\"study-tab\" class=\"clearfix eael-tab-content-item active-default\" data-title-link=\"study-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='Setting-the-Stage-From-Basics-to-Reality' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>8.1 <\/strong><strong><b>Setting the Stage \u2013 From Basics to Reality<\/b><\/strong><\/h2>\r\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-77839 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage.png\" alt=\"Setting the Stage\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Setting-the-Stage-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>In the earlier discussion, we simplified the idea of a mutual fund by imagining a group of people pooling their money together to invest with a shared purpose. That simplification was deliberate it helped us grasp the foundation without getting lost in technicalities. Now, as we move forward, it\u2019s time to step into the real world of mutual funds and see how this industry actually looks and operates.<\/p>\r\n<p>Before we dive into the fund factsheet the key document that tells you everything about a scheme\u2014it\u2019s important to understand the scale of the mutual fund industry in India. Think of it like learning about the size of a city before exploring its neighborhoods. Knowing how wide and deep the industry runs will give you perspective when you later analyze individual funds.<\/p>\r\n<p><strong><b>The Breadth of the Industry<\/b><\/strong><\/p>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-77847 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1.png\" alt=\"How Big is the Indian Mutual Fund Industry\" width=\"1462\" height=\"1144\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1.png 1462w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1-300x235.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1-1024x801.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1-768x601.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1-50x39.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1-100x78.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/How-Big-is-the-Indian-Mutual-Fund-Industry-1-150x117.png 150w\" sizes=\"(max-width: 1462px) 100vw, 1462px\" \/><\/p>\r\n<p>India\u2019s mutual fund ecosystem is vast. In mid-2021, there were 45 Asset Management Companies\u00a0 registered with SEBI; by 2026 the number had grown to nearly 60. Each AMC is essentially a professional fund house that designs and manages investment schemes. To make this relatable, imagine the FMCG industry: you have multiple brands like Britannia, Nestl\u00e9, or ITC, each offering dozens of products. Similarly, in mutual funds, you have AMCs like HDFC, ICICI Prudential, Kotak, Axis, and DSP, each offering a wide menu of schemes for investors.<\/p>\r\n<p><strong><b>Expansion of the Industry (2021\u20132026)<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>AUM Growth<\/b><\/strong>: From about \u20b935 lakh crore in mid 2021, the industry expanded to \u20b953.4 lakh crore by March 2024and further to \u20b968\u201369 lakh crore by late 2024, finally reaching \u20b982.64 lakh crore by September 2026 . This represents more than a doubling in five years.<\/li>\r\n<li><b><\/b><strong><b>Investor Base<\/b><\/strong>: Folios rose to 78 crore by March 2024, translating into 4.46 crore unique investors, up from 2.39 crore in 2021. By June 2026, folios had reached 27.86 crore, held by about 6.2 crore unique investors. Women now account for about 23% of investors, showing a gradual diversification of participation.<\/li>\r\n<li><b><\/b><strong><b>Retail vs Institutional<\/b><\/strong>: Individual investors dominate equity, hybrid, and solution oriented schemes, holding nearly 60% of AUM. Institutions remain strong in debt and liquid funds.<\/li>\r\n<\/ul>\r\n<p><strong><b>Schemes \u2013 The Product Line of AMCs<\/b><\/strong><\/p>\r\n<p>Across these fund houses, there were about 1,510 schemes\u00a0running at that time (2021); by December 2025, there were about 1,763 open-ended schemes. A scheme is nothing but a specific fund with a defined investment objective. For instance, one scheme may focus on large-cap stocks, another on debt instruments, and yet another on hybrid strategies. To give you a parallel: think of a restaurant chain like Domino\u2019s. While the brand is one, the menu has multiple pizzas, sides, and desserts. Each scheme is like a different item on the menu, catering to varied tastes and needs.<\/p>\r\n<p>Some AMCs are particularly prolific. In 2021, Nippon India AMC, for example, had around 145 schemes, while SBI AMC managed about 144. This variety ensures that investors with different risk appetites and goals can find something suitable.<\/p>\r\n<p><strong><b>The Scale of Money Managed<\/b><\/strong><\/p>\r\n<p>Now, let\u2019s talk about the money involved. In 2021, the Indian mutual fund industry was managing close to \u20b935 lakh crore. To put that in perspective, this is larger than the GDP of many countries. Within this, SBI AMC alone managed over \u20b95.2 lakh crore, while Axis AMC handled about \u20b92 lakh crore. On the other end of the spectrum, smaller players like Yes AMC\u00a0 managed just a few hundred crores. By March 2026, SBI Mutual Fund alone managed about \u20b912.5 lakh crore.<\/p>\r\n<p>This money doesn\u2019t come from one type of investor it\u2019s a mix. Roughly half of it around \u20b918.8 lakh crore came from individual investors like you and me, while the other half about \u20b916.3 lakh crore came from corporates and institutions. It\u2019s like a cricket stadium filled with both everyday fans and corporate sponsors each contributing to the energy of the game.<\/p>\r\n<p><strong><b>The Investor Base<\/b><\/strong><\/p>\r\n<p>Finally, consider the sheer number of people involved. By July 2021, there were about 2.39 crore unique investors\u00a0in mutual funds. That\u2019s nearly the population of a mid-sized state in India, all participating in this financial ecosystem. By mid-2026, the count had grown to about 6.2 crore. Each investor may hold multiple schemes, but this number reflects individuals who have chosen mutual funds as a path to grow their wealth.<\/p>\r\n<p><strong><b>Why These Numbers Matter<\/b><\/strong><\/p>\r\n<p>You don\u2019t need to memorize these figures. They are meant to give you perspective. When you later look at a fund factsheet, you will realize that each scheme is just one small piece of this massive puzzle. Understanding the industry\u2019s scale helps you appreciate the importance of regulation, transparency, and professional management.<\/p>\r\n<p>In the next step, we\u2019ll zoom in from this bird\u2019s-eye view and learn how to read a fund factsheet,the document that tells you exactly what a scheme is about, how it invests, and whether it fits your financial goals.<\/p>\r\n<p><strong><b>The Role of the AMC<\/b><\/strong><\/p>\r\n<p>An Asset Management Company is like the engine room of the mutual fund industry. It designs, manages, and runs multiple schemes, each with its own purpose. Think of it as a film production house: one studio can produce many movies, but each movie has its own storyline, cast, and audience. Similarly, an AMC can launch several schemes, but each scheme has a distinct investment objective.<\/p>\r\n<p>For instance, one scheme might aim to invest in India\u2019s top 50 blue-chip companies, while another might chase opportunities in fast-growing smaller listed companies. Once the objective is declared, the fund manager is bound to follow that script throughout the life of the fund. Changing such a fundamental attribute requires SEBI\u2019s clearance, written notice to investors and a window in which they can exit without any exit load. This consistency is what gives investors clarity and confidence.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='Exploring-a-Factsheet' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>8.2. <b>Exploring a Factsheet<\/b><\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-77840 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet.png\" alt=\"Exploring a Factsheet\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Exploring-a-Factsheet-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Every scheme comes with a factsheet, a concise document that tells you what the fund is all about. For example we\u2019re looking at a scheme from SBI Mutual Fund. Suppose we pick the SBI Small Cap Fund. The factsheet is often called a \u201cone-pager\u201d because it condenses the most important details into a quick snapshot.<\/p>\r\n<p>The very first section usually spells out the objective. For SBI Small Cap, it might say something like: <em><i>\u201c<\/i><\/em>The fund seeks long-term capital growth by investing primarily in small-cap companies across diverse sectors.<em><i>\u201d<\/i><\/em>\u00a0From this single line, you already know three things:<\/p>\r\n<ul>\r\n<li>The goal is capital growth, not regular income.<\/li>\r\n<li>The investments will be in equity and equity-related instruments -stocks, warrants, etc.<\/li>\r\n<li>The focus is on small-cap companies, which are smaller listed firms ranked 251st and below by market capitalisation with high growth potential but also higher risk.<\/li>\r\n<\/ul>\r\n<p><strong><b>What the Objective Tells You<\/b><\/strong><\/p>\r\n<p>This objective is more than just a formal statement\u2014it sets the boundaries for the fund manager. If the scheme says \u201csmall-cap,\u201d it must keep at least 65% of its assets in small-cap stocks, so the manager cannot suddenly load the portfolio with large-cap giants like Reliance or Infosys. Investors choose the scheme because of its stated mandate, and SEBI ensures that AMCs stick to it.<\/p>\r\n<p>So, when you read \u201cSBI Small Cap Fund,\u201d you immediately know the flavor of the investment: it\u2019s adventurous, growth-oriented, and focused on emerging businesses rather than established giants.<\/p>\r\n<p><strong><b>The Research Approach<\/b><\/strong><\/p>\r\n<p>Most factsheets also give a glimpse into how the AMC selects stocks. This part can sound technical, but let\u2019s break it down with simpler examples. A fund manager might look at:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Promoter integrity<\/b><\/strong>: Is the leadership trustworthy? For example, a company run by promoters with a history of fraud would be avoided.<\/li>\r\n<li><b><\/b><strong><b>Cash flow strength<\/b><\/strong>: Does the business generate surplus cash after expenses? A retailer like <em><i>DMart<\/i><\/em>is admired for its strong cash flows.<\/li>\r\n<li><b><\/b><strong><b>Survival through cycles<\/b><\/strong>: Has the company weathered downturns? Firms like <em><i>Marico<\/i><\/em>or <em><i>Pidilite<\/i><\/em>\u00a0have proven resilience across decades.<\/li>\r\n<li><b><\/b><strong><b>Simple business model<\/b><\/strong>: Easy-to-understand businesses are preferred. A company making paints or biscuits is simpler to analyze than a conglomerate dabbling in ten unrelated industries.<\/li>\r\n<li><b><\/b><strong><b>Financial quality<\/b><\/strong>: Ratios like return on equity or debt-to-equity are checked. For instance, a debt-free company like <em><i>Infosys<\/i><\/em>scores high here.<\/li>\r\n<li><b><\/b><strong><b>Low leverage<\/b><\/strong>: Companies with little or no borrowing are safer bets, especially in volatile markets.<\/li>\r\n<\/ul>\r\n<p>These criteria are essentially filters. The AMC doesn\u2019t expect investors to decode them\u2014it\u2019s their job. As an investor, you only need to know that the fund manager is applying a disciplined process to pick stocks.<\/p>\r\n<p><strong><b>Why Investors Don\u2019t Need to Worry About the Details<\/b><\/strong><\/p>\r\n<p>Here\u2019s the key point: you don\u2019t need to master these metrics yourself. If you already knew how to evaluate promoters, cash flows, and leverage, you\u2019d probably skip mutual funds altogether and invest directly in stocks. The whole reason mutual funds exist is to let professionals do the heavy lifting while you participate in the growth story.<\/p>\r\n<p>The factsheet is simply a window into their thought process. It reassures you that there\u2019s a method behind the madness, but you don\u2019t have to get lost in the jargon.<\/p>\r\n<p><strong><b>Pulling It Together<\/b><\/strong><\/p>\r\n<p>So, when you pick up a factsheet\u2014whether it\u2019s Kotak, SBI, HDFC, or ICICI\u2014the structure is broadly the same:<\/p>\r\n<ol>\r\n<li><b><\/b><strong><b>Objective<\/b><\/strong>: What the fund aims to achieve.<\/li>\r\n<li><b><\/b><strong><b>Category<\/b><\/strong>: Equity, debt, hybrid, liquid, etc.<\/li>\r\n<li><b><\/b><strong><b>Research philosophy<\/b><\/strong>: How stocks are chosen.<\/li>\r\n<li><b><\/b><strong><b>Portfolio snapshot<\/b><\/strong>: Which companies\/sectors the fund currently holds.<\/li>\r\n<li><b><\/b><strong><b>Performance data<\/b><\/strong>: Returns compared to benchmarks.<\/li>\r\n<\/ol>\r\n<p>Each section is designed to help you decide whether the scheme matches your own financial goals.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Benchmark-The-Yardstick' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>8.3<span style=\"color: #f1566d\">. <\/span><\/strong><strong><b>Benchmark \u2013 The Yardstick<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77842 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick.png\" alt=\"Benchmark the Yardstick\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/Benchmark-the-Yardstick-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Every mutual fund needs a benchmark index to measure its performance. Think of it like a school exam: your marks only make sense when compared to the class average. For example, if we look at the HDFC Mid Cap Fund , its benchmark is the NIFTY Midcap 150 Total Return Index. This ensures that when you evaluate returns, you\u2019re comparing apples to apples.<\/p>\r\n<p>If a mid-cap fund were benchmarked against the Nifty 50, it would be misleading like comparing the lap time of a family hatchback to a Formula 1 car. The benchmark tells you whether the fund manager is genuinely adding value or just riding the market wave.<\/p>\r\n<p><strong><b>Type of Scheme \u2013 Open-ended, Equity, Growth<\/b><\/strong><\/p>\r\n<p>The factsheet also specifies the type of scheme, which usually has three parts:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Open-ended<\/b><\/strong>: This means the fund has no expiry date. You can enter or exit anytime. For example, ICICI Prudential Large Cap Fund is open-ended, so you can invest today and redeem after 10 years\u2014or even after 10 months. In contrast, a closed-ended fund like a Fixed Maturity Plan\u00a0 locks your money for a fixed term, say 3 years . Open-ended funds are more flexible for most investors.<\/li>\r\n<li><b><\/b><strong><b>Equity<\/b><\/strong>: This indicates the asset class. Equity funds invest in company shares, while debt funds invest in bonds or government securities. Hybrid funds mix both. So, if you pick Axis Large Cap Fund, you know it\u2019s focused on stocks, not bonds.<\/li>\r\n<li><b><\/b><strong><b>Growth<\/b><\/strong>: This refers to how profits are treated. In the growth option, earnings are retained and reinvested in the fund, allowing compounding to work its magic. We\u2019ll explore this more in a moment.<\/li>\r\n<\/ul>\r\n<p><strong><b>Fund Manager and Allotment Date<\/b><\/strong><\/p>\r\n<p>The <strong><b>fund manager<\/b><\/strong>\u00a0is like the captain of the ship. For instance, if you\u2019re considering SBI Equity Hybrid Fund, you would want to check who manages it, how long they have managed it, and their experience across equity and debt markets. A quick background check helps you gauge whether your money is in steady hands.<\/p>\r\n<p>The <strong><b>allotment date<\/b><\/strong>\u00a0tells you when the fund started. An older fund, say launched in 2005, has a long track record you can analyze. A newer fund launched in 2023 may not yet have proven itself across market cycles. It\u2019s not a deal-breaker, but history makes analysis easier.<\/p>\r\n<p><strong><b>Plans \u2013 Regular vs Direct<\/b><\/strong><\/p>\r\n<p>This is one of the most important distinctions:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Regular Plan<\/b><\/strong>: Imagine you buy mangoes from a local vendor. The farmer sells them at \u20b960\/kg, but the vendor charges you \u20b970\/kg because he earns a margin. Similarly, in a regular plan, the AMC pays a commission to the distributor who sold you the fund. That commission is built into the regular plan\u2019s higher expense ratio, so it ultimately comes from your returns.<\/li>\r\n<li><b><\/b><strong><b>Direct Plan<\/b><\/strong>: Here, you buy directly from the AMC\u2014no middleman, no commission. For example, if you invest in UTI Flexi Cap Fundvia a direct plan, you save that extra cost, which means slightly higher returns over the long term. If you can select and monitor funds yourself, direct plans are usually the cheaper choice.<\/li>\r\n<\/ul>\r\n<p><strong><b>Options \u2013 IDCW vs Growth<\/b><\/strong><\/p>\r\n<p>Funds also offer <strong><b>options<\/b><\/strong>\u00a0on how returns are handled:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>IDCW Payout (formerly \u201cDividend Payout\u201d)<\/b><\/strong>: Since April 2021, SEBI has called this option Income Distribution cum Capital Withdrawal (IDCW). Suppose you choose the IDCW payout option of <em><i>a <\/i><\/em>hybrid fund. The AMC may, at its discretion, distribute part of the scheme\u2019s surplus to you. This is not the same as passing on dividends received from portfolio companies, and a payout can include part of your own capital. The NAV falls by the amount paid out, and the payout is taxed at your income-tax slab rate. It can still be useful if you want periodic cash.<\/li>\r\n<li><b><\/b><strong><b>IDCW Reinvestment<\/b><\/strong>: Instead of cash, the distributed amount is used to buy more units of the same fund. This increases your holdings without you having to reinvest manually.<\/li>\r\n<li><b><\/b><strong><b>Growth Option<\/b><\/strong>: No payouts are made. All profits stay in the fund, boosting the NAV. Over time, this creates a compounding effect. For long-term wealth creation, the growth option is often preferred because it maximises reinvestment and defers tax until you redeem.<\/li>\r\n<\/ul>\r\n<p><strong><b>SIP \u2013 Systematic Investment Plan<\/b><\/strong><\/p>\r\n<p>A SIP\u00a0is like a monthly subscription to wealth creation. You commit to investing a fixed amount regularly. For example, you might invest \u20b93,000 every month in Nippon India Small Cap Fund. Over 10\u201315 years, this disciplined approach averages out your purchase cost across market ups and downs (rupee-cost averaging) and can build a sizeable corpus.<\/p>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77848 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows.png\" alt=\"SIP Inflows\" width=\"1429\" height=\"976\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows.png 1429w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows-300x205.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows-1024x699.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows-768x525.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows-50x34.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows-100x68.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/SIP-Inflows-150x102.png 150w\" sizes=\"(max-width: 1429px) 100vw, 1429px\" \/><\/p>\r\n<p>Most AMCs specify a minimum SIP amount\u2014now often \u20b9100 to \u20b9500 (SEBI and AMFI are also promoting \u20b9250 \u201cChhoti SIPs\u201d)\u2014and a minimum number of instalments, commonly 6 or 12. This makes SIPs accessible even for beginners.<\/p>\r\n<p><strong><b>Minimum Investment<\/b><\/strong><\/p>\r\n<p>If you don\u2019t want to start with SIP, you can make a lump sum investment. For instance, Aditya Birla Sun Life Flexi Cap Fund \u00a0sets its own minimums; across the industry these are commonly \u20b9100\u2013\u20b91,000 per SIP instalment and \u20b9100\u2013\u20b95,000 for a lump sum, so always check the scheme\u2019s factsheet. This ensures accessibility while maintaining discipline.<\/p>\r\n<p><strong><b>Load Structure \u2013 Entry and Exit<\/b><\/strong><\/p>\r\n<p>Finally, the <strong><b>load structure<\/b><\/strong>\u00a0tells you about charges when entering or exiting the fund:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Entry Load<\/b><\/strong>: This used to be a fee for investing, but SEBI abolished it in August 2009. Funds now show \u201cNil\u201d for entry load.<\/li>\r\n<li><b><\/b><strong><b>Exit Load<\/b><\/strong>: This is a penalty for withdrawing too soon. For example, Kotak Midcap Fund may charge 1% if you redeem within 12 months, but nothing if you stay invested longer. This discourages short-term trading and encourages long-term commitment.<\/li>\r\n<\/ul>\r\n<p>In short, the \u201cother facts\u201d section of a factsheet is where you learn about the rules of engagement: how the fund is structured, who runs it, how you can invest, and what costs you\u2019ll bear. It\u2019s like reading the fine print before signing a contract\u2014essential for making informed decisions.<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>SIP Assets<\/b><\/strong>: By November 2024, SIP AUM hit \u20b913.54 lakh crore, rising further to \u20b918.62 lakh crore by August 2026 (about 21% of industry AUM), with over 10 crore contributing SIP accounts.<\/li>\r\n<li><b><\/b><strong><b>Monthly Inflows<\/b><\/strong>: Grew from \u20b917,073 crore in Nov 2023 to \u20b925,320 crore in Nov 2024, a 48% jump. In September 2026, they reached a record \u20b932,490 crore.<\/li>\r\n<li><b><\/b><strong><b>Regional Trends<\/b><\/strong>: Smaller states like Lakshadweep, Himachal Pradesh, and Puducherryrecorded SIP shares above 40% of their total AUM, while larger hubs like Delhi and Maharashtra\u00a0had lower SIP penetration (&lt;20%).<\/li>\r\n<\/ul>\r\n<p><strong><b>Category Trends<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Equity Funds<\/b><\/strong>: Equity AUM grew 55% in FY24, reaching \u20b923.5 lakh crore. Flexi-cap funds led with \u20b93.5 lakh crore, while multi-cap and small-cap funds grew fastest (85% and 82% respectively).<\/li>\r\n<li><b><\/b><strong><b>Sectoral\/Thematic Funds<\/b><\/strong>: These saw 79% growth in 2024, with AUM rising from \u20b92.58 lakh crore to \u20b94.61 lakh crore.<\/li>\r\n<li><b><\/b><strong><b>ETFs and Index Funds<\/b><\/strong>: Expanded 28% in 2024, reaching \u20b911.29 lakh crore, reflecting investor appetite for passive strategies.<\/li>\r\n<\/ul>\r\n<p><strong><b>Structural Shifts<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Domestic vs Foreign Ownership<\/b><\/strong>: Domestic institutional investors (mutual funds, insurers, pension funds and others) have owned a larger share of NSE-listed companies than foreign investors since early 2025; in the June 2026 quarter, they held 19.5% versus 15.1% for foreign portfolio investors. This marks a historic inversion in market ownership, driven by SIP inflows and declining foreign equity holdings.<\/li>\r\n<li><b><\/b><strong><b>Market Share<\/b><\/strong>: Domestic mutual funds now hold a record 11.6% of NSE-listed companies, up from just 3.56% in 2015. Foreign investors\u2019 share has dropped to a 17year low of 15.1%.<\/li>\r\n<\/ul>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='What-is-the-Riskometer' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>8.4 <\/strong><strong><b>What is the Riskometer?<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77843 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer.png\" alt=\"What is the Riskometer\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-the-Riskometer-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Every mutual fund carries a certain level of risk, and SEBI requires AMCs to self-assess and disclose this risk to investors. This is done through a simple visual tool called the Riskometer. Think of it as the speedometer in a car it tells you how fast the ride is.<\/p>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77849 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer.png\" alt=\"What is Riskometer\" width=\"1192\" height=\"902\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer.png 1192w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer-300x227.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer-1024x775.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer-768x581.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer-50x38.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer-100x76.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/05\/What-is-Riskometer-150x114.png 150w\" sizes=\"(max-width: 1192px) 100vw, 1192px\" \/><\/p>\r\n<p>For example, if you look at the Axis Small Cap Fund, the Riskometer will point to \u201cVery High,\u201d the top of its six levels (Low, Low to Moderate, Moderate, Moderately High, High and Very High). That\u2019s because small-cap companies are more volatile\u2014they can grow rapidly but also fall sharply. On the other hand, a HDFC Liquid Fund\u00a0will typically show \u201cLow to Moderate\u201d risk because it invests in short-term debt instruments, which are relatively stable.<\/p>\r\n<p><strong><b>Why Risk Disclosure Matters<\/b><\/strong><\/p>\r\n<p>This disclosure prevents mis-selling. Imagine if a small-cap fund were marketed as \u201csafe\u201d like a fixed deposit. That would mislead investors who expect stability but end up facing sharp ups and downs. The Riskometer ensures transparency: you know upfront whether you\u2019re stepping into a roller coaster or a calm boat ride.<\/p>\r\n<p>It\u2019s similar to food packaging\u2014if a packet of chips says \u201clow fat\u201d but is actually loaded with oil, that\u2019s deceptive. SEBI\u2019s rule ensures mutual funds don\u2019t mislabel their risk profile.<\/p>\r\n<p><strong><b>High Risk Doesn\u2019t Mean Avoidance<\/b><\/strong><\/p>\r\n<p>Now, just because a fund is marked \u201cHigh Risk\u201d doesn\u2019t mean you should avoid it. Risk and reward are two sides of the same coin. Small-cap or sectoral funds may be risky, but they also carry the potential for higher returns.<\/p>\r\n<p>The key is time horizon. If you invest in a small-cap fund for just six months, you\u2019re gambling. But if you stay invested for 7\u201310 years, the ups and downs smooth out, and the probability of wealth creation increases. In mutual funds, time is the best antidote to volatility, though it never eliminates risk.<\/p>\r\n<p>For example, investors who stayed invested in mid-cap funds through the 2008 financial crisis saw their portfolios recover and grow significantly by 2015. Those who exited early locked in losses.<\/p>\r\n<p><strong><b>Key Takeaways<\/b><\/strong><\/p>\r\n<p>From the factsheet and Riskometer, here are the main lessons:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Investment objective<\/b><\/strong>: This is the guiding principle for how the fund manager invests.<\/li>\r\n<li><b><\/b><strong><b>Open-ended vs Close-ended<\/b><\/strong>: Open-ended funds run indefinitely, while close-ended funds have a fixed maturity.<\/li>\r\n<li><b><\/b><strong><b>Regular vs Direct plans<\/b><\/strong>: Regular plans involve distributor commissions, while direct plans save you that cost, boosting returns.<\/li>\r\n<li><b><\/b><strong><b>IDCW vs Growth options<\/b><\/strong>: You can choose to receive IDCW payouts, reinvest them, or let profits compound in the growth option.<\/li>\r\n<li><b><\/b><strong><b>Riskometer<\/b><\/strong>: A simple, SEBI-mandated tool that shows the risk level of the fund, helping investors make informed choices.<\/li>\r\n<\/ul>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = jQuery('#text_slider');\n\t\tjQuery('.text_slider_goto1').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 0);\n\t\t});\n\t\tjQuery('.text_slider_goto2').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 1);\n\t\t});\n\t\tjQuery('.text_slider_goto3').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 2);\n\t\t});\n\t\tjQuery('.text_slider_goto4').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 3);\n\t\t});\n\t\tvar resize_24084 = jQuery('.owl-carousel');\n\t\tresize_24084.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p>                    <\/div>\n\t\t        \n                    <div id=\"slides-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"slides-tab\">\n\t\t\t\t        <p><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png\" \/><\/p>                    <\/div>\n\t\t        \n                    <div id=\"videos-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"videos-tab\">\n\t\t\t\t        <p><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png\" \/><\/p>                    <\/div>\n\t\t                    <\/div>\n        <\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Study Slides Videos 8.1 Understanding Returns The most important question is: How much money has the fund made? It\u00e2\u20ac\u2122s no wonder that this is the first thing people think about. People invest in hopes of making money, and returns tell you what the fund made in the past. Historical returns sell funds\u00e2\u20ac\u201dthat\u00e2\u20ac\u2122s why mutual fund &#8230; <a title=\"Mutual Fund Factsheet\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/understanding-the-performance-of-your-fund\/\" aria-label=\"Read more about Mutual Fund Factsheet\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":11088,"menu_order":8,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"class_list":["post-24399","markets","type-markets","status-publish","format-standard","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/24399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/markets"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=24399"}],"version-history":[{"count":15,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/24399\/revisions"}],"predecessor-version":[{"id":77845,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/24399\/revisions\/77845"}],"up":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/11088"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=24399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=24399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}